The “Fund Managers Market Outlook Survey” was carried out by the Hong Kong Investment Funds Association during mid-January covering 13 leading fund houses that manage global assets worth almost US$9trn.
About 85% of the surveyed fund managers were overweight equities compared with 77% in October and, interestingly, none of them were underweight. Conversely, only 8% of the sample were positive on the outlook for bonds, with the majority (69%) underweight in the asset class.
In terms of country allocation, fund managers favour developed markets such as the US, Europe and Japan over other Asian and emerging markets. The category of ‘Japan equities’ was newly included by the HKIFA in the January survey.
The survey showed European markets have come into favour, with a significant percentage of the managers moving from being neutral to overweight. Also, more fund managers have turned bullish on US equities, while many turned cautious on emerging markets.
In terms of bonds, fund managers continue to favour high yields, while the survey saw interest picking up for European bonds, but reflected a bearish trend on emerging market bonds.
Bruno Lee, HKIFA Unit Trust sub-committee chairman said: “By and large, the asset allocation approach adopted by fund managers in January is similar to that of October. More respondents favour equities over bonds.
“In terms of markets, managers have shown a preference of developed markets over the emerging ones in view of the impacts of the US tapering and the ramifications on global fund flows, as well as the economic fundamentals and the different pace of recoveries.”
Results of the HKIFA fund managers market outlook survey
|
|
Underweight |
Neutral |
Overweight |
|||
|
Jan 2014 |
Oct |
Jan 2014 |
Oct |
Jan 2014 |
Oct |
|
|
Broad asset classes |
||||||
|
Equities |
0% |
0% |
15% |
23% |
85% |
77% |
|
Bonds |
69% |
70% |
23% |
23% |
8% |
7% |
|
Cash |
50% |
27% |
42% |
46% |
8% |
27% |
|
Equities |
||||||
|
U.S. |
15% |
23% |
23% |
23% |
62% |
54% |
|
Europe |
15% |
15% |
23% |
54% |
62% |
31% |
|
Asia (excl. Greater China) |
18% |
8% |
55% |
67% |
27% |
25% |
|
Greater China |
10% |
11% |
30% |
22% |
60% |
67% |
|
Japan |
0% |
– |
42% |
– |
58% |
– |
|
Emerging Markets |
23% |
8% |
54% |
61% |
23% |
31% |
|
Bonds |
||||||
|
U.S. |
34% |
33% |
50% |
50% |
16% |
17% |
|
Europe |
27% |
33% |
55% |
58% |
18% |
9% |
|
Asia |
10% |
11% |
80% |
78% |
10% |
11% |
|
Emerging Markets |
46% |
15% |
39% |
46% |
15% |
39% |
|
High Yield |
8% |
0% |
15% |
17% |
77% |
83% |
